Does Alloy have the right to collect allowances from suppliers based on franchisee purchases?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to collect and retain any and all allowances, rebates, credits, incentives, or benefits (collectively, "Allowances") offered by manufacturers, suppliers, and distributors to you, to us, or to our affiliates based upon your purchases of products and services from manufacturers, suppliers, and distributors. We or our affiliates will have all of your right, title, and interest in and to any and all of these Allowances. We or our affiliates may collect and retain any or all of these Allowances without restriction (unless otherwise instructed by the manufacturer, supplier, or distributor). We may also choose to contribute these Allowances to the Brand Development Fund, but if we do so it does not reduce or eliminate your requirement to pay the
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy retains the right to collect allowances, rebates, credits, incentives, or benefits from suppliers based on franchisee purchases of products and services. Alloy or its affiliates will possess all rights to these allowances and can collect and retain them without restriction, unless the supplier instructs otherwise. Alloy may also choose to contribute these allowances to the Brand Development Fund.
This means that Alloy franchisees may not directly benefit from supplier incentives or rebates that are tied to their purchases. Instead, these financial benefits accrue to Alloy, which may use them at its discretion. While Alloy could contribute these allowances to the Brand Development Fund, this does not reduce the franchisee's obligation to pay into the fund.
For a prospective franchisee, this arrangement reduces the potential for direct cost savings through supplier deals. It is important to understand how Alloy uses these collected allowances, whether they are reinvested into the system through the Brand Development Fund or used for other purposes that benefit the franchisor. Franchisees should inquire about the specific allocation of these funds to assess the overall financial impact on their business.